Engaged Capital said last week that in order for the struggling retailer to "reverse years of underperformance" it must agree to replace its chief executive.
"The board needs to come to the same conclusion that everyone else already has -- it is time for new leadership at ANF," said a Dec. 3 letter written by Glenn Welling, managing member of Engaged Capital. "We urge the board to immediately commence a CEO search for candidates with relevant retail apparel and turnaround experience."
Most importantly though, Jeffries is the key stumbling block to the possibility of a sale of the company, Engaged Capital said.
"A sale of the company to a private equity buyer may represent the best option for shareholders. However, as we have learned through discussions with industry insiders and private equity firms, Mr. Jeffries' presence represents a major stumbling block to a transaction," the letter said.
Engaged Capital said it was "disturbed" that the board's reaction was to "ignore the information and re-sign Mr. Jeffries," according to a statement by Welling on Monday.
"This decision appears to be made without any substantive discussion with shareholders -- a rushed response, less than one week after receiving our letter," the statement read. "We consider this an outright dereliction of the board's fiduciary duties. This action is further proof that our board exists to serve one master, Mr. Jeffries, instead of the shareholders that elected them."
Engaged Capital is "considering all options available to it as shareholders in order to hold the board accountable for its decisions."
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